Colombia Shifts Online Gambling Tax to Gross Gaming Revenue Model
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Colombia has revised its online gambling tax framework, moving the application of value-added tax (VAT) from player deposits to gross gaming revenue (GGR). The change, implemented via an emergency fiscal decree and effective from January 2026, recalibrates how the 19% VAT is calculated for licensed online gambling operators under the supervision of Coljuegos.
Under the updated model, VAT is now levied on GGR—defined as total stakes minus winnings paid to players—rather than on all deposited funds. The adjustment follows sustained industry criticism of the previous deposit-based tax system, which operators argued overstated taxable activity and placed licensed platforms at a competitive disadvantage versus offshore and unregulated alternatives.
Key Takeaways
- Operators benefit from a more sustainable tax base, as VAT is now aligned with actual gaming revenue rather than total player deposits.
- Market competitiveness improves by reducing structural pressure that previously inflated effective tax rates beyond international norms.
- Regulators retain fiscal stability while supporting channelisation toward licensed platforms in Latin America’s most mature regulated market.
The deposit-based VAT was introduced as part of Colombia’s broader fiscal reform efforts, aimed at increasing state revenue amid budgetary pressures. However, industry associations, including Fecoljuegos, warned that taxing deposits—regardless of wagering outcomes—could suppress player activity, reduce operator margins, and ultimately shrink the regulated market. Several operators reported declining volumes following the initial implementation.
By shifting to a GGR-based approach, Colombia aligns its online gambling tax structure with models used in established European jurisdictions, where taxation is typically applied to operator revenue rather than player turnover. While the headline VAT rate remains unchanged at 19%, the revised calculation significantly lowers the effective tax burden for compliant operators.
Despite the adjustment, stakeholders note that Colombia’s total fiscal load—including concession fees, income tax, and regulatory contributions—remains relatively high. Legal analysts also caution that the use of emergency decree powers could face political or judicial scrutiny, though no immediate reversals have been signalled.
For the wider gambling industry, the move reinforces Colombia’s position as a regulatory bellwether in Latin America, demonstrating a willingness to course-correct when fiscal policy risks undermining long-term market viability. The revised framework is expected to stabilise investment conditions for both domestic and international online casino and sportsbook operators entering the Colombian market.
Sources: Coljuegos, iGaming Business, Gambling Insider, Global Gambling News, statements from Fecoljuegos
